The 100 million share placement does not require shareholder approval but the 50 million free option placement requires shareholder approval. I have no quarrel with the 100 million share placement as it was known before hand by the market. However I do have a problem with the placement price if it was not what shareholders approved. I also have a problem with the free options which may require shareholder approval at EGM. The problem with Resolution 5 approved during the AGM is that it did not define how the average would be calculated and would quite reasonably be open to legal challenge.
The 100 million share rights issue which is in addition to the 100 million share placement will require shareholder approval. I just hope they don't do a Nexus (NXS) and allow the sophisticos to double dip in the rights issue.
Now fluffy what would be the point of Novus and CPSS pumping this one up? Anything above 1.07c is pure profit. If there will be any pumping it should be from the company e.g. release news about distribution arrangements for PNO. I know less about this company's management than you so would be interested in your balanced views. I think I will also sneak over to the OBJ announcements to see hw its share price performed after share issues.
I sent this email to John Palermo if anyone wants to have a try too ([email protected]):
Dear John,
I am a shareholder of Palermo and seek urgent clarification of the terms of the placement. I believe the placement was undertaken pursuant to Resolution 5 approved on 6 November 2009 which states:
The Shares will be issued at a price equal to at least 80% of the average market price of Shares, calculated over the last 5 days on which sales of Shares were recorded before the date upon which the issue is made.
The simple average of the closing price for the last five trading days is 1.5cents (excluding today). So using only the simple average, the minimum share placement price should have been 1.22c, NOT 1.07c. Could you please clarify why the placement appears to have been undertaken at a price lower than approved by shareholders? Can the company please also make an announcement about how the average share price was worked out for the past five trading days? It would also be desirable for the company to make an announcement about the identity of the sophisticated investors who partook the placement so that other shareholders can satisfy themselves that the placement was not made to management or management's associates.
Also shareholders have not approved the issue of one option for every two shares held according to the wording of Resolution 5. I wonder why the company saw the need to issue these free options considering that its share price is considerably more than the placement price even without the free attaching options.
I look forward to receiving your reply soon. Many thanks for your attention and I wish the company every luck in relaunching Thermalife successfully.
Best regards,
CAI Price at posting:
1.7¢ Sentiment: Hold Disclosure: Held
(20min delay)